For assets < $300, Capital allowances immediate deduction tests
Under the uniform capital allowance system (UCA), an immediate deduction is allowable for certain assets. The assets must:
- be used mainly to produce non-business assessable income
- cost $300 or less.
For assets > $300, Depreciation
You generally can't deduct spending on capital assets immediately; instead you claim the cost over time, reflecting the asset's depreciation (or decline in value).
The ATO has made rulings on the number of years that you can spread your deduction claim of an asset costing > $300.
For example, as at 1 July 2016, a computer costing >$300 is to be claimed over a span of 4 years. In simple terms, this means that if the asset cost $4,000, then your deduction will be $1000 p.a for the next 4 years.
tax year deduction
yr 1 $1k
yr 2 $1k
yr 3 $1k
yr 4 $1k .
TOTAL: $4k
To find out the effective life of your asset >$300, and for your particular job industry, click below here: